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Futures in New York closed above $66 a barrel after swinging between small gains and losses during Wednesday’s session. U.S. crude stockpiles fell to the lowest since late February last week, according to a government report, while gasoline and distillate supplies also dropped. Gauges of fuel demand for the country continue to highlight progress toward a return to normal consumption levels.

Meanwhile, world powers continue to conduct talks to revive a nuclear agreement with Iran. A deal could pave the way for the lifting of sanctions and the unleashing of a flood of Iranian barrels stashed on tankers at sea.

“The fundamentals in the U.S. are pretty supportive,” with stockpiles declining heading into the summer travel season, said Bill O’Grady, executive vice president at Confluence Investment Management in St. Louis. “That’s why the market is holding up even with this idea Iran is going to come back.”

Crude posted a fourth day of gains as the downtrend in U.S. stockpiles reinforces expectations that the world’s largest oil-consuming country will face tight supplies this summer. Shrinking gasoline supplies may even lead to a supply squeeze on par with those incurred when a hurricane knocks out oil refineries in Texas and Louisiana.

See also: A Hurricane-Like Gasoline Supply Pinch Faces Holiday Motorists

“Every data point in the report was bullish to some degree,” with inventory declines across the board, said Matt Sallee, portfolio manager at Tortoise, a firm that manages roughly $8 billion in energy-related assets. That reinforces the view that “the U.S. is leading the recovery globally, while U.S. producers remaining restrained.”

The Energy Information Administration report showed a rolling four-week average of gasoline supplied topped 9 million barrels a day for the first time since March 2020. Distillate stockpiles were at the lowest since April 2020, with its comparable demand gauge at the highest in three weeks.

The decline in distillate stockpiles comes as even the hardest-hit part of the oil market is making a comeback. Jet fuel’s outlook has brightened with U.S. airports seeing some of the busiest foot traffic since the pandemic decimated air travel. There has been no less than 1 million people passing through Transportation Security Administration checkpoints each day since this past March, according to the agency’s data.

Despite near-term concerns surrounding a return of Iranian supply and Covid-19 flare-ups, particularly in India, the demand recovery in key markets outside the U.S. is also perking up. In the U.K., road use last week matched its highest level since the pandemic began.

(Corrects units in chart.)

©2021 Bloomberg L.P.

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